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Secrets To Competing With Consumer Products Industry Giants

By Don Gordon

May 13, 2017 | 2 Minute Read

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Small and midsize companies in the consumer products space sometimes emerge in the most unexpected ways. Some get their start as a personalized service that delivers curated boxes to their subscribers’ doorstep every month to remove the confusion of shopping for clothes, jewelry, cosmetics, and a host of other products. Others may target a niche market that is ignored by the mass market. And a remaining few decide to put their spin on traditional goods by innovating new delivery mechanisms or packaging that are exciting to consumers.

Lacking the deep pockets and even deeper resource pools of their larger rivals, small and midsize firms may find it challenging to innovate continuously while optimizing operational efficiency and profitability. However, they do have an advantage over larger competitors: The ability to respond to market dynamics with speed, flexibility, and nimbleness while maintaining a close relationship with the consumer.

A growing consumer audience calls for a consumer-first mindset

Although the IDC report revealed that small and midsize players in the consumer product industry cite revenue growth (83.4%), cash-flow improvement (81.6%), and cost reduction (76.3%) as top priorities, a focus on consumer experiences can also deliver significant opportunities for growth building.

Never before has the consumer products space seen such a close link between revenue generation and the ability to respond to customer behavior, habits, and needs. Modern consumers are much more empowered and informed, dictating everything from product features to brand interactions. They value expertise and outcomes over attention-grabbing packaging, advertising, or brand personality. They are receptive to the experiences and opinions of their peers. And more important, their purchase decision is nearly complete before they arrive at the physical or online store.

Small and midsize businesses in the consumer products industry can no longer compete only on product, price, place, and promotion. Today, it’s all about serving a digitally savvy, ever-evolving consumer audience with content, context, convenience, and consistency across all channels of consumer interaction. And as consumer behaviors and preferences change, firms must remain alert to those dynamics and stand ready to move in lock-step with every phase.

To do this well, companies must align their business model with what matters most to their consumers. Focusing on the entire buying journey, not individual touchpoints, enables firms to identify common frustrations and rethink the scope of their products and services to address them. By linking that insight with operational performance, consumer products firms can strike a balance between long-term revenue and costs while consistently providing the interactions consumers want and differentiating the business from all competitors, large and small.

Don Gordon

Don Gordon leads global Consumer Products industry marketing for SAP. Previously he led global Retail industry marketing for IBM. He lives in Philadelphia, considered by many to be the finest city on earth.